Home ownership remains a pipe dream for B40, M40

BACK in January 2019, Bank Negara Malaysia (BNM) had launched an RM1 bil Affordable Home Fund (AHF) to help lower-income earners (B40) nationwide own their first homes.

The programme, which was available for two years starting Jan 2, 2019, was meant for Malaysians with a maximum monthly household income of RM2,300, with the maximum property price permitted under the scheme set at RM150,000.

The programme was revised in Sept 2019, and the eligibility for the Fund was expanded to a maximum household income of RM4,360 and the maximum property price was doubled to RM300,000 per unit.

The lower interest rate was aimed at helping reduce the burden on the B40 segment and let them have more disposable income for other needs and also to have some savings for emergencies.

National House Buyers Association honorary secretary-general Datuk Chang Kim Loong in an opinion piece published in FocusM back in February 2019 called the move a “big step forward” but questioned the exclusion of the middle-income earners (M40) from the fund.

“Due to the rising costs of living, even the M40 had found it very challenging to buy their first homes and are thus in need of some form of assistance as well,” he wrote.

Home ownership a distant dream for many

Houses priced beyond the regular wage earner have been a problem even before the COVID-19 pandemic.

However, the matter became more pronounced over the last year with the pandemic in full swing, coupled with rising unemployment rates as well as lockdown restrictions resulting in many individuals facing a daily struggle to put food on the table and make ends meet.

What’s worse, the damage from the economic impact of the pandemic has spread rapidly to other sectors, including property. This is despite the various relief measures and loan moratoriums that the Government had introduced.

Needless to say, with house prices stay as unaffordable as ever, home ownership has become a distant dream for many, including those from the middle 40% (M40) income group.

More than 600,000 households from the M40 have slipped into the bottom 40% (B40) category as the COVID-19 crisis delivered a major blow on Malaysians’ income level, according to the Economic Action Council (EAC) secretariat.

Against the country’s 7.28 million households, as reported by the Statistics Department for the year 2019, this represents at least 8% of households that have seen incomes drop below the B40 income maximum threshold of RM4,850 a month.

The significant drop in income levels raises concerns about widening inequality and the impact on Malaysians’ socioeconomic standing, and this in turn shifts attention to the government’s game plan to remedy the situation.

At this point of time, perhaps it is safe to say that unless the country’s economy can recover from the onslaught of the COVID-19 pandemic, home ownership will remain a pipe dream not only for the B40 but for the M40 as well. – Sept 13, 2021

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